Launched in October 2020, Bancor v2.1 introduced two new concepts: impermanent loss insurance and single-side staking. This is achieved through having a supply of BNT that is elastic. Each pool consists of a BNT and a ERC20-compatible token (“Token A”) pair. When a liquidity provider provides liquidity for Token A, the protocol will mint an equivalent value of BNT. If the liquidity provider adds BNT instead, the protocol will burn BNT that was previously minted, allowing the liquidity provider to take the place of the protocol. Through this, a liquidity provider can partake in single-side staking without risking exposure to other tokens.